Business risk is the risk associated with investing in a particular company or industry. As examples in the news (e.g., Enron and Worldcom and Bear Stearns during the 2000s and, more recently, Borders Books and MF Global Securities) have demonstrated, it is risky to have a large portion of one's assets invested in any one company. Many factors can affect business risk including mismanagement by company officers and directors, legal actions against a company or its products, changes in government regulations, and declining company earnings.
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